If you care about the Internet, you should care about this. The leaked draft of the new Telecoms Regulation is the Telecoms Package ‘MkII’. But unlike its predecessor, it contains legal twists that create some mega- horrors. Whoever wins this argument in the Commission will determine who runs the networks and how for the next decade.
EU Commissioner for the Digital Agenda, Neelie Kroes, has taken a lashing from rival DG Competition over her proposed shake-up of the telecoms market . The attack on Mrs Kroes draft policy suggess an internal fight over the aims and scope of the Regulation, which was leaked last month by European Digital Rights. But an investigation of Commission documents suggests that she has not yet firmed up her plans and is exposed to rival demands from other Commissioners . The possibility of splits in the Commission over the Regulation came to light in
the Financial Times (FT) earlier this week. The FT uncovered an attack on Neelie Kroes’ proposals by DG Competition, which is alleged to have criticised Mrs Kroes for ‘lacking ambition’. The attack appears to been made in some written feedback to Mrs Kroes and her team from DG comp. The feedback was given as part of the inter-stitial consultation processes whereby the Commission finalises its draft legislation. This is the Regulation laying down measures to complete the European single market for electronic communications and to achieve for a Connected Continent.
According to the FT, DG Comp considers that Mrs Kroes draft text is ‘suboptimal’ and should include more far reaching changes. In particular, DG Comp is said to be demanding a pan-European telecoms regulator. That is, a single entity which would be responsible for regulating telecoms in all 28 Member States. It would erode the role of the national regulators, such as Ofcom, or even disband them completely.
That latter demand would until now have put fear in the hearts of many, and it is politically highly controversial. In 2009, a Commission proposal for regulatory oversight by the Commission was rejected in the European Parliament negotiations over the Telecoms Package (Del Castillo report). The 2009 proposals did not go anywhere near as far as this new draft Telecoms Regulation (see EU midsummer horror: leaked draft of new Telecoms Regulation).
The FT article has helpfully illuminated an internal discussion among European Commissioners and their respective Directorates. Other sources suggest that Mrs Kroes has been uncertain as to how radical the changes should be.
The language of ‘ambition’ stems from a Commissioners’ meeting in June when Mrs Kroes is understood to have led a discussion on the ‘appropriate level of ambition’ for the draft Telecoms Regulation. This suggests that there is either uncetainty in Mrs Kroes DG Connect, or that there are more bullish demands coming from other DGs. Mrs Kroes suggested that the 2009 Package is merely the legal ‘backdrop’ for the new law, only there to ‘preserve a desgree of predictability for investors’, indicating that it has been her intention to alter the legal structures that govern telecoms in Europe.
The broad aim of the new Telecoms Regulation is to create a single market for telecoms services. In principle, this would mean that services could be offered by any operator across the whole of Europe, with national boundaries and jurisidictional differences losing their significance. But it seems that Mrs Kroes has been unsure how far she could go in eradicating national regulatory and tariff differences.
Certainly, the leaked draft of the Regulation as seen already indicates sweeping changes. It is arguable that it is not intended merely as an amendment or update of the 2009 Telecoms Package, but to bring in something new. What is not clear is how far the changes could go.
We should also look carefully at what DG Comp would mean by lack of ambition.
Seeping through the sub-text of the Telecoms Regulation is the matter of industrial consolidation, which appears to be one the policy aims. That should concern DG Comp, since consolidation implies a reduction in competition. and changes in the market structure that threatens the competitive framework. 'Ambition' could suggest that the Commission wants to promote greater consolidation.
From DG Comp's viewpoint, support for market consolidation would seem to be a little puzzling. On the other hand, it could explain why DG Comp wants a strong pan-european regulator that could maintain some level of competition.
Consolidation of the Telecoms Market is unlikely to be good news for Internet users. It stands to create a pan-European oligopoly of Internet providers, increasing their power over the user community and what we can and cannot do on the networks. The provisions in the Regulation will ultimately determine which of these companies lives and dies.
A statement from Mrs Kroes’ press office issued in response to the FT article says that there was ‘strong support’ for Mrs Kroes from the other Commissioners. But other sources suggest only that there was broad support for the guidelines of the new Regulation, which may engender a slightly different interpretation. Support for the guidelines is not the same as strong support for all the measures. So it is really uncertain at this stage which way the Commission will swing. Will it go the whole way to disbanding or dis-empowering national regulators and empowering the multi-national operators? Or will it hold back and proceed more cautiously, retaining some discretion for member states? Is Mrs Kroes being disingenuous when she claims to be "fighting like hell for a EU you can believe in"?
To read the history of the 2009 Telecoms Package, see my book The Copyright Enforcement Enigma - Internet Politics and the Telecoms Package (Palgrave Macmillan 2012).
The leaked draft of the Regulation laying down measures to complete the European single market for electronic communications and to achieve a Connected Continent can be downloaded from European Digital Rights (EDRi)
If you are working on analysis of the Telecoms Regulation, please get in touch or send me links. If anyone at DG Connect or DG Comp would like to clarify 'ambition' , please get in touch too.
This is an original article from Iptegrity.com and reflects research that I have carried out. If you refer to it or to its content, please cite my name as the author, and provide a link back to iptegrity.com. Media and Academics – please cite as Monica Horten, 2013, EU rifts over how far to push new telecoms rules - DG Comp attacks Kroes, 17 August 2013. Commercial users - please contact me.